The US Federal Reserve Expresses Concerns about Stablecoins
Stablecoins have raised concerns for the US Federal Reserve due to their potential to disrupt established markets. The link between volatile digital asset trading and the broader financial community is seen as a risk that could upend stability. An example of this was seen when Circle Internet Financial Ltd., a cryptocurrency startup, faced a situation where a bankrupt bank held a significant portion of its USD reserves. This caused panic among traders and drove the stablecoin price below $1. The government intervened to stabilize the situation, but the incident highlighted the volatility of stablecoins and their potential impact on regulated markets.
Declining Demand for Stablecoins Affects Investor Sentiments
Stablecoins have experienced a decline in demand due to various market events and regulatory measures. The lack of transparency regarding the reserves backing stablecoins has led many investors to sell their holdings. Moody’s reports that the cumulative market value of stablecoins has decreased from over $180 billion in 2022 to around $120 billion in 2023. This shift reflects a change in investor attitude towards stablecoins.
The Future of Stablecoins Remains Uncertain
The decline in stablecoins has negatively affected investor sentiments and raised doubts about their future. According to Techopedia, predictions for TerraClassicUSD token price suggest it may reach a maximum of $0.05437 by the end of 2024. While there may still be opportunities for trading, price swings are unlikely to deviate significantly from this projection. However, trading volume is expected to increase, potentially bringing the token closer to $0.1. In 2025, the projected TerraClassicUSD Price is anticipated to range from $0.04869 to $0.07600.
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